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Income Tax Appellate Tribunal, DELHI BENCHE ‘H’ NEW DELHI
Before: SHRI SAKTIJIT DEY, VICE- & SHRI GIRISH AGRAWAL
Assessee by : None Revenue by : Sh. Ramdhan Meena, Sr. DR Date of hearing : 06.07.2023 Date of pronouncement: 06.07.2023 ORDER PER SAKTIJIT DEY, V.P.: Captioned appeal by the Revenue and cross objection by the assessee arise out of order passed by learned Commissioner of Income-tax (Appeals) for the assessment year 1996-97.
ITA No. 3681/Del/2000 & C.O. No. 04/2004 2
Before we proceed to deal with the captioned appeal and cross objection, it is necessary to give a brief factual backdrop.
Assessment in case of the assessee was originally competed under section 144 of the Act on 26.03.1999 determining total income of Rs.7,98,810/- as against declared income of Rs.1710/-. Against the assessment order so passed, the assessee preferred an appeal before learned first appellate authority challenging the validity of the assessment order, inter alia, on the ground that in absence of a valid notice under section 143(2) of the Act, the assessment order is invalid.
Learned first appellate authority accepted the contention of the assessee and quashed the assessment order. Resultantly, he did not decide the issues on merits. Against the order of learned first appellate authority, Revenue filed an appeal before the Tribunal. The assessee also filed a cross objection, since, the first appellate authority had not decided the appeal on merits. Be that as it may, the Tribunal in order dated 07.10.2004 disposed of, both, the appeal and cross objection.
While doing so, the Tribunal upheld the decision of learned first appellate authority that in absence of a valid notice issued under section 143(2) of the Act, the assessment order is invalid. Accordingly,
ITA No. 3681/Del/2000 & C.O. No. 04/2004 3 the Tribunal treated the cross objection as infructuous and dismissed it.
Against the order of the Tribunal, Revenue preferred an appeal before the Hon’ble High Court. While deciding the appeal of the Revenue, Hon’ble High Court reversed the decision of the Tribunal and learned first appellate authority holding that notice under section 143(2) of the Act was validly issued, hence, the assessment order cannot be declared as invalid. After the decision of Hon’ble High Court, the assessee filed a miscellaneous application to revive the cross objection.
In order dated 25.07.2008, the Tribunal allowed miscellaneous application of the assessee and restored the cross objection to the file of the Assessing Officer with a direction to frame de novo assessment.
In the meanwhile, against order of Hon’ble High Court, the assessee preferred an appeal before Hon’ble Supreme Court. However, Hon’ble Supreme Court dismissed the appeal with the following observations :
“Learned counsel for the appellant states that he is not getting any instructions from the appellant and hence, he is not in a position to argue the present appeal. In view of the statement made, the appeal is dismissed for non-prosecution. However, we clarify that in view of the judgment of the High Court dated 28.05.2007 upholding the notice under section 143(2) of the Income Tax Act, 1961, the Income Tax Appellate Tribunal would have to hear the appeal on merits.
ITA No. 3681/Del/2000 & C.O. No. 04/2004 4
Parties would appear before the Tribunal on 14th October, 2022. In case of non-appearance, the appeal may be dismissed in default.” Pending application(s), if any, shall stand disposed of.”
In the meanwhile, in pursuance to the directions of the Tribunal in order dated 25.07.2008, the Assessing Officer completed the assessment de novo under section 254/143(3) of the Act vide order dated 30.12.2009 determining total income at Rs.7.98.810/-. Against the assessment order so passed, the assessee preferred an appeal before learned first appellate authority. While deciding the appeal in order dated 24.08.2010, learned first appellate authority granted partial relief to the assessee. Thus, in nutshell, this is the chronological events relating to the present proceedings before us.
As discussed earlier, while dismissing the SLP filed by the assessee, the Hon’ble Supreme Court in order dated 15.09.2022 had specifically directed the Tribunal to decide the appeal filed by the Revenue on merits. Even, the Hon’ble Supreme Court directed the parties to appear before the Tribunal on 14th October, 2022. In fact, the Hon’ble Supreme Court made it clear that in case of non-appearance, the appeal can be dismissed in default. Pertinently, though, the appeal
ITA No. 3681/Del/2000 & C.O. No. 04/2004 5 was fixed for hearing on multiple occasions, the assessee never appeared. Every effort made by the Tribunal to ensure attendance of the assessee failed to evoke any result due to complete non- cooperation of the assessee. In view of the aforesaid, we proceed to dispose of the appeal ex parte qua the assessee after hearing learned Departmental Representative and based on materials on record.
As can be seen from the assessment order, the Assessing Officer while completing the assessment, had made following additions :
(i). Unexplained income Rs.80,000/- (ii). Disallowance of depreciation Rs. 4,432/- (iii). Increase in Inventories Rs.96,280/- (iv). Increase in sundry creditors Rs.2,66,480/- (v). Adhoc disallowance of expenses Rs.3,48,170/-
It is observed, the first appellate authority, while deciding the appeal of the assessee in the second round, has confirmed the following additions in absence of any supporting evidences furnished by the assessee :
(i). Unexplained income Rs.80,000/- (ii). Disallowance of depreciation Rs. Rs. 4,432/- (iii). Disallowance of expenses Rs.1,00,000/-
ITA No. 3681/Del/2000 & C.O. No. 04/2004 6
Before us also, the assessee has neither appeared nor furnished any supporting evidence to disturb the finding of the departmental authority. In view of the aforesaid, we are inclined to uphold the additions to the extent sustained by learned first appellate authority as mentioned in paragraph 7 of this order.
In the result, Revenue’s appeal is partly allowed and cross objection is dismissed for statistical purposes.
Order pronounced in the open court on 06/07/2023